Right Thinking from the Left Coast

Tag: Energy industry

Following on Alex’s post about the booming energy sector, you should check out this report from Der Spiegel about the disaster that is Germany’s green energy sector:

For society as a whole, the costs have reached levels comparable only to the euro-zone bailouts. This year, German consumers will be forced to pay €20 billion ($26 billion) for electricity from solar, wind and biogas plants — electricity with a market price of just over €3 billion. Even the figure of €20 billion is disputable if you include all the unintended costs and collateral damage associated with the project. Solar panels and wind turbines at times generate huge amounts of electricity, and sometimes none at all. Depending on the weather and the time of day, the country can face absurd states of energy surplus or deficit.

If there is too much power coming from the grid, wind turbines have to be shut down. Nevertheless, consumers are still paying for the “phantom electricity” the turbines are theoretically generating. Occasionally, Germany has to pay fees to dump already subsidized green energy, creating what experts refer to as “negative electricity prices.”

On the other hand, when the wind suddenly stops blowing, and in particular during the cold season, supply becomes scarce. That’s when heavy oil and coal power plants have to be fired up to close the gap, which is why Germany’s energy producers in 2012 actually released more climate-damaging carbon dioxide into the atmosphere than in 2011.

Emphasis mine. New gas plants are able to cut greenhouse gas emission in half through better engineering and using gas instead of coal. But somehow, green energy is increasing greenhouse gas emissions (although that may partially be because Germany is foolishly phasing our nuclear power).

It actually gets worse. Big factories are being told to shut down when energy use exceeds capacity. Spiking energy prices and taxes are incredibly hard on poor Germans, with some 300,000 having the power shut off every year for delinquent bills. The soaring bills are mainly going into some 4,000 different subsidies that mainly go to affluent people who can afford to dabble in green energy.

I should point that Der Spiegel is not a conservative rag that opposes green energy. What they actually are suggesting is modeling Germany’s energy policy after Sweden’s, which abandoned micromanaging in favor of overall mandates on renewable energy. This has allowed Swedish energy interests to invest in whatever technology is most promising (mainly hydroelectric, but many greens don’t like hydro). For the US, a better policy might be a carbon tax, which attempt to fold in the environmental cost of CO2 into the cost of carbon energy and could be balanced by cutting or eliminating corporate income taxes. But however you look at it, the system of micro-management and subsidies is a disaster.

Long term, the only solution to global warming is technological innovation. The current version of solar and wind are not up to replacing fossil fuels. The energy grid is not efficient enough. And there is no way of storing energy effectively. Here’s a question: will German businesses and universities make big breakthroughs in dark rooms? Will they make them when their industry can’t run because there is no power? Will they do it through a maze of red tape, subsidies and mandates?

The good news is that we have time to back away from this foolishness. The latest data show that global warming has slowed, as it did in the 1960’s and 1970’s, and climate sensitivity may have been overestimated. We have a lot more time to deal with this than we thought — decades more. That means we don’t have to break our civilization on the alter of wind turbines to stop global warming NOW RIGHT NOW. We have time to unshackle industry, fund basic research and make the true breakthroughs that will give our economy the same boost 20 years from now that fracking and shale are giving it now.